2000-01-17 Kazak Politics & MacroEconomics

Kazakhstan Weekly

Politics & Macro Economics

Monday January 17, 2000

Tenge Drops 64.6% in 1999

The exchange rate of Kazakhstan’s national currency, the tenge, dropped 64.6% in 1999 (10.7% in 1998) to 138.25 tenge/USD 1 by the end of the year, the National Bank (NB) of Kazakhstan’s Chairman, Grigory Marchenko, said at a press conference. The tenge suffered its worst drop in value (30.3%) after it was allowed to float freely against the U.S. dollar on 5 April 1999. The exchange rate was 88.3 tenge/USD 1 at the time.  Marchenko said that in the following months the soft decline of the tenge was the result of a relative currency exchange balance.

The volume of Kazakhstani bank transactions on the stock segment of the currency market grew during 1999 by 61.4% to over USD 2.1 billion from 1998. The NB bought currency worth USD 10.3 million on the market last year, Marchenko said. (Interfax, Bloomberg)

National Bank Reports Growth in Gold and Foreign Currency Reserves

Kazakhstan’s gross gold and foreign currency reserves increased by 1.98% in 1999 compared to 1998, reaching USD 2 billion, said Grigory Marchenko (the Chairman of the NB) at a news conference.

He said that the republic’s net gold and foreign currency reserves amounted to USD 1.52 billion, which was USD 228.8 million more than in 1998. (Interfax, Bloomberg)

Securities Official Reflects on Market Development as NSC Marks Fifth Year

Kazakhstan’s National Securities Commission (NSC) celebrated its five-year anniversary on Tuesday. In marking the milestone, the NSC’s Executive Director, Galina Shalgimbayeva, praised the republic’s progress in establishing one of the best stock market infrastructures in the CIS over the course of the past half-decade.

Shalgimbayeva noted that last year Kazakhstan’s securities market entered a new stage in its development.  In 1999, the securities market witnessed the appearance of a new financial tool—municipal bonds issued by the Mangystau region and the cities of Almaty and Astana. The Kazakhstan Stock Exchange (KASE) also offered its first foreign securities, selling common shares in Kyrgyztelecom, Kyrgyzenergo and the Kant Concrete-Slate Plant.
According to Shalgimbayeva, this year the NSC plans to focus on the introduction of a mechanism that will encourage companies to place their shares on the stock market. The commission plans to boost the capitalisation of the Central Share Depository and ensure the safety of the trade-payment systems on the KASE, Interfax reported. (Golden Eagle Partners)

National Bank Explains New Currency Exchange Regulations

The National Bank of Kazakhstan recently specified new regulations for foreign currency exchange operations, the Kazakhstanskaya Pravda newspaper reported.

The central bank’s new regulations set the minimum charter capital for opening a currency exchange outlet at KZT 250,000. All operating exchange kiosks must comply with the new charter capital requirements by April 1.

Another change concerns the registration of large currency exchanges. Currency exchange outlets will have to fill out special certificates to report any currency exchange operations worth USD 200 or more. Purchases of foreign currency equalling or exceeding USD 3,000 will be subject to registration. (Golden Eagle Partners)

Pension Assets Will Not Be Invested in Real Sector

The assets of Kazakhstan’s pension funds will not be used to finance the real sector of the economy, including the project to modernise the Atyrau-Samara oil pipeline, said the Executive Director of the National Securities Commission, Galina Shalgimbayeva. Earlier, the Minister of Labour and Social Protection, Nickolay Radostovets, stated that 10% of all pension assets will be used to finance the real sector as early as this year, particularly the Atyrau-Samara oil pipeline project. Ms Shalgimbayeva said pension assets are sacred money and therefore will be invested very conservatively, i.e. in risk-free financial instruments. As of 1 December 1999 Kazakhstan’s total pension assets reached about USD 430 million. (Interfax)
Kazakhstan Petroleum Association Criticises Idea of Oil Export Limitation

The Kazakhstan Petroleum Association (KPA), which unites oil companies working in Kazakhstan, has expressed its disapproval of the Government’s decision to limit oil exports. The Chairman of the KPA, Edward Verona, called this decision a problem for Kazakhstani oil companies and said it will certainly influence the activity of these companies as well as the realisation of oil projects. As reported earlier, the Government will limit oil exports in 2000 to 22 million tonnes in order to support the three Kazakhstani oil refineries that supply oil products to the domestic market.

According to the KPA’s estimates, Kazakhstani oil companies will produce about 30 million tonnes of crude in 2000 excluding condensate. The Chairman questioned whether or not companies will be willing to sell the remaining 8 million tonnes to Kazakhstani refineries at prices that are lower than the world price. In Verona’s opinion, if the Government’s decision to limit exports is based on national interests, it should compensate the gap in prices. (Interfax)

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